It is a disturbing mark of our times that Ségolène Royal enjoys such little support from the media and politicians on this side of the Channel, notwithstanding her highly credible performance in Wednesday's TV debate. Nicolas Sarkozy seems to be their overwhelmingly preferred choice. Downing Street, unsurprisingly, is backing him: Tony Blair prefers the right as always - Silvio Berlusconi, José María Aznar, Angela Merkel, George Bush. David Cameron is supporting Sarkozy. So is the Economist. Matthew Parris, the Times columnist, is backing Royal, but only for the perverse reason that France is not yet ready for Sarkozy, but a Royal presidency will prepare the ground for his subsequent triumph.

The dominant political consensus appears to be that only the right can sort out the political problems of a country. The preferred choice, thus, is either a party of the right or, as in the case of our soon-to-be-departed prime minister, a party of the left led by a leader of the right. In this judgment, two criteria reign supreme. First, is the party or candidate prepared to adopt Anglo-American neoliberal economic principles, or at least to move closer to them? And second, are they willing to adopt a more pro-American foreign policy?

It is no surprise that neoliberal economic thinking still predominates. New Labour enthusiastically embraced the central tenets of Thatcherism and has presided over an extremely long boom. It is rather harder to explain the continuing attachment to pro-Americanism at a time when US foreign policy stands deeply discredited. Two European nations emerged with credit from the Iraq disaster: France and Germany. Both had the courage to withstand the Bush administration and oppose the US-led invasion.

Who was right: Chirac and Schröder or Bush and Blair? Bush and Blair stand condemned by their own publics and face imminent political extinction. The ability of the French establishment, right and left, to think independently of the US for the past half-century is to be commended in contrast to the supine pro-Americanism that has long characterised British foreign policy thinking and which reached its nadir in 2003. In that same year, France did the world a service by leading the opposition within the UN and refusing to allow the body to be used as a tool of Anglo-American policy. While the US and Britain were committed to the idea of a unipolar world, Chirac upheld the principle of a multi-polar world. As the world changes before our eyes, you need only one partially sighted eye to see who was right. In contrast, New Labour's foreign policy has been a disaster. It is difficult to see how anyone can seriously advocate it as a model for other European countries.

More fundamentally, however, the choices facing European nations are simply not reducible to the two issues of neoliberal economics and a pro-US foreign policy. Such thinking displays a shrivelled view of what matters in the life of a nation, a reflection of how politics and political choice has been debased in the neoliberal era. In late 2005, Sarkozy, then interior minister, condemned the riots that took place in the suburbs, where those of African and Arab origin were concentrated, in calculatedly inflammatory terms, displaying zero sympathy for the plight of the ethnic minorities or any willingness to understand their grievances.

It was a defining political moment. At the centre of Sarkozy's appeal is race: he does not need to bang on about it because in that moment everyone, white and brown, knew where he stood. He staked a claim for the Le Pen vote. As a result of Sarkozy's action, he is hated in the suburbs. Under huge pressure and amid tight security, he eventually visited one such suburb. As François Bayrou, the centrist, third-party candidate, said: "Five years in the interior ministry and he can no longer enter parts of the French suburbs." The suburbs, in response, have registered and voted, politically mobilised for the first time and in no doubt as to what is at stake in this election.

France faces a very different choice in this election to the two preferred by the political consensus here. With an ethnic minority community of a similar size to that in Britain, France can seek either to include them on a new basis or demonise them and blame them for the country's problems - and build a new political majority with race at its core. The most dramatic expression of the former possibility was the multiracial French team that won the World Cup in 1998 and the extraordinary reception that it received in France. The polar opposite of that moment was Sarkozy's condemnation of the riots in November 2005 as purely a criminal matter to be repressed by brutal police action.

None of this seems to matter to our political leaders or media commentators: courting racism and the far right appear to count for little compared with the demons of the left. If you are white, racism is too easily ignored and forgiven, regarded as of burning concern only to the ethnic minorities, and therefore of relatively marginal significance. Yet these things will matter more and more.

Western Europe is becoming increasingly diverse, especially France and Britain. That process will continue apace. The ability of our societies to embrace all races and cultures will be crucial to their future stability, security and success. The alternative is the "Sarkozy route", which has all too many parallels elsewhere in Europe, not least in the Netherlands: repression, ghettoes, gated communities, rampant racism, the exclusion of ethnic minorities from mainstream society, a form of low-level civil war.

One of the great themes of postwar Europe has been immigration from the developing world. It has transformed almost exclusively white countries into increasingly multiracial and multicultural societies. It has been traumatic and conflictual, but also liberating and educative. Europe faces two great challenges, neither of which seem to be on the political radar screen of our leaders and pundits. First, the ability to build inclusive multiracial societies. And second, adapting Europe to a world where it is no longer pre-eminent but one of many centres, and a declining one at that.

The two are closely related. They are far more fundamental to Europe's future than whether or not Sarkozy is going to liberalise France's labour market. In the context of a multiracial society, Royal offers inclusivity and Sarkozy exclusivity - she respects diversity while he preaches nativism. On these grounds alone, the choice could hardly be clearer.

· Martin Jacques is a visiting research fellow at the Asia Research Centre, London School of Economics